How do you launch a physical product from an idea?

A few days ago, I talked to a Mixergy Premium member about what he thought was missing from the site.

He said, physical products. He’s building a company that manufactures products and he wanted to hear how others do it.

Well, this is the interview for everyone who’s curious about.

Angela Newnam is the founder of Knock Out Panties, patented, natural undergarments that keep you ready for anything any time. For men and women. Day and night wear.

Angela Newnam

Angela Newnam

Knock Out Panties

Angela Newnam is the founder of Knock Out Panties for women who want underwear that’s ready for “anything, anytime”.

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Full Interview Transcript

Andrew: Hey there Freedom Fighters. My name is Andrew Warner, I am the founder of Mixergy.com, home of the ambitious upstart. And a few days ago I talked with one of my current, premium members and I asked him what he thought was missing from the site and he said physical products. See, he’s building a business that manufactures and sells physical products and he wants to hear how other people do it. Well, this interview is for people like him and anyone who wants to broaden their understanding of business beyond the usual software that we cover over here.

Angela Noonan. Whoa, I screwed that up again Angela, call me out anytime I screw anything up because I call out my guests, so you should call me out, too.

Angela: Okay.

Andrew: Angela New-

Angela: Newnam.

Andrew: Newnam. Why do I keep wanting to say Newman? Newnam?

Angela: Everybody reverses that.

Andrew: Even though we talked about it before we started.

Well, Angela is the founder of Knockout, which creates patented natural undergarments that keep you ready for anything, anytime. They’re for men and women, day and nightwear. This interview is sponsored by Toptal. They are my exclusive sponsor. Why? Because they know that a lot of people in my audience need help with software development and what Toptal is a network of some of the best software developers on the planet.

All you do is you tell them what you are looking for, they go out to their network and find the right developers for you. They pre-screen them. You get to talk to them and make sure that they’re the right cultural fit, they have the right understanding of the way you work. And if you want to hire them, they can start the next day. Forty hours a week, part-time, full-time, or even just a few hours. If you need a developer, I urge you to check out Toptal.com. Angela, welcome.

Angela: Thank you. I am excited to be hear.

Andrew: I am, too. Especially because there is something that you showed me before we started that I think the audience needs to see. What is that?

Angela: I can actually even put it on because this is what inspired me to get started. So you can see I am wearing a, not a Middle Eastern top but. This is actually a hunter’s camouflage hoodie. This one is specially designed with odor absorbing technology and it was developed by a company called Dan River. Dan River patented this process which puts this natural odor absorption onto natural fabrics and they market it to hunters back in the 2000s time frame.

Andrew: And you had an idea for a different application for it. What was the application that you had in mind?

Angela: Well, so the story is kind of funny. I didn’t know about this when I first got my idea. My idea was to make better underwear for women.

Andrew: Why? Why would that be the goal?

Angela: Okay, I’ve had three kids. I’m sitting around at playgroup with my friends as our little babies are rolling around on the ground and we’re talking about trying to workout, get back in shape, and sweating, and yucky things that women talk about. And all agreed that underwear wasn’t good. We were all wearing… you know, Lululemon was new and people had their nice yoga clothes and exercise gear. But underwear had not changed at all. And the way I think about it is, underwear is where the heavy lifting is really occurring.

Andrew: You know what? I’ll be honest with you. I’m a little embarrassed to talk to you about this but I have to always push myself beyond my embarrassment point. What is the problem with women’s underwear? What was the problem that you saw with women’s underwear? It seems like an ancient technology almost. What’s the problem?

Angela: So, women’s doctors or doctors of women, recommend that you wear cotton in your underwear for breath-ability and all that. But when cotton gets wet, when you’re sweating, everybody knows it’s not very comfortable. That was the whole genesis of starting Under Armour because the cotton T-shirt underneath the pads was rubbing the skin raw. So, any time cotton is wet, it is not soft and nice, the way we expect it to be. So, what synthetics did was basically let moisture pass through without getting that clammy feeling. But you don’t want that in your underwear. So, you’re still stuck with yucky underwear if you are sweating a lot.

Andrew: Okay, all right. So that is what you were talking about, and then that led you to do what?

Angela: So, I had this idea to make better underwear that was also pretty and comfortable. But the first thing I did was do a patent search to see if someone else had the idea that I had already. And in the process of doing that patent search I found this patent in the database for the hoodie. I was like, that would be a great thing to combine with a wicking technology to put this odor absorption on there too. And so, it really peaked my interest because I have a manufacturing background and I knew this company, Dan River. It was a very large $2 billion textile company that had recently gone through bankruptcy liquidation.

Andrew: Angela, I’m sorry. Let me pause here for a moment. Why go through the patent search if you have an idea for making underwear more comfortable? Why not just do a little bit of research about what makes other clothing more breathable and then just go create something from scratch? Why look for patents?

Angela: Well, if you create something that you may have not heard of it before but it is already patented by someone else, you can’t just go make it. If you do, they could sue you, come back to you. If you make something and start selling it before you file your own patent, then you can’t patent it after the fact. A lot of people don’t know that but what I did is I want to make sure nobody else already had my idea. And even if someone else has the idea but hasn’t made the product you still can’t do it. It’s our loss.

Andrew: I see. And maybe you are also taking a shortcut towards innovation. You don’t have to hire the researchers, you don’t have to do all the work yourself to figure out what this new magical fabric would be. Somebody has already done it. You just want to look for that person.

Angela: Right. And I was looking to see if anybody had the sort of solution that I was looking for in underwear, with a liner that would do more than just a regular liner and no one had. There were diapers and all kinds of things that you can imagine in the patent database. But nothing in a single layered application that I was trying to do. And this because it was mentioned as could be applied in undergarments popped up in my search. So, because I knew the company, I knew they had gone through this liquidation, I figured well maybe someone’s bought this patent. People sell IP when they liquidate everything else and I’ll go try to license it.

As it turns out, when I was able to track it all down through some family connections, which is a whole other story of its own, the family connections is this whole thing. It still had not been sold. It was the last thing not liquidated and I made an offer and they took it.

Andrew: The patent search that you did was that just on the US PTO.gov site-

Angela: Yes, yes.

Andrew: You just were doing the search there? Okay. And the family connections, is not that your family happened to know the manufacturer, right? The factory was in your parent’s hometown and they started looking around.

Angela: Dan River, who created this original technology was located in Danville, Virginia. My husband grew up in Danville, Virginia.

Andrew: I see.

Angela: Was there his entire life. My dad worked for Milliken and Company, which was a high tech textile company who sold the first fabrics to Under Armour. So it was a lot of connections in here. And then the more crazy thing is when I actually looked at who actually developed this patent for Dan River, the names of the patent developers actually live in the same town as my parents live in, which is a tiny town of about 10,000 people. So it is a very small world. When I saw that I said, “There is really something here that I need to investigate.”

Andrew: And then your parents just looked them up in the white pages?

Angela: Yeah, I called my dad and I said, “Can you look this person up and see if they are still living in the area?” He did and I said, “Call them and see if he’d be willing to talk to me about this patent.” I wanted to find out if it really worked the way it said it worked. He ended up coming on board with us as our technology consultant in R&D.

Andrew: Who did? The inventor?

Angela: He was one of the patent developers.

Andrew: I see. How do you know what kind of… actually, before you even made a deal to buy, you wanted to make sure that it really did what you wanted it to do. And that is such a clever thing that you did. What did you do?

Angela: Okay, this is crazy.

Andrew: I love it.

Angela: I went on eBay. Well, this was almost 6 years ago now so eBay was around, people know about it. And, I found several of these hoodies. That’s all I could find left that was available in the market because hunters had bought up all the rest of the clothes out of stock. And I cut this into small pieces and put them in Ziploc bags because I didn’t have high tech testing equipment the way the big companies would. And I put little bits of yucky smelling things. Like, I put some garlic on one swatch and I put peanut butter on another one, and fish oil, that kind of thing that has a pungent smell. And I stuck them in the Ziploc bag.

Then I had another piece of fabric that was not the treated, no trace fabric and I did the same thing, put it in a Ziploc bag. Let it sit there. And then after an hour or so, open them and see if you could smell. And the no trace bags had no odor at all. And the others ones you could smell exactly what was in there. And then waited another day and another day and the smells got worse in the other bags and they never, never had any odor. It was amazing.

Andrew: That’s still… first of all, that’s clever. But it still doesn’t say how it holds up in human tests. And do you decided to test it.

Angela: Yes.

Andrew: Can you tell the audience what you did?

Angela: I had enough fabric to make some underwear out of this camouflage, which you can imagine was a great laughing topic when I delivered this to several of my girlfriends and said, “I hope you have an open mind but I want you to try these underwear.” So we were on a beach trip and I brought my little sample bag down and they got to pick out the ones they wanted. We wore them and exercised in them and tested them on a hot sweaty beach week trip and washed them and dried them again. Everyone agreed it worked.

Andrew: I read in Business Week that the no-trace molecules contain the same active ingredients as Febreze. They are bound to the cotton in the finishing process creating small pockets that trap scents. I understand not wanting to wear synthetics, but how do you know if this is healthy? What did you do to test that?

Angela: That’s an excellent question. We are very concerned that everything is clean. All of our liners are dye-free. They are white. And this technology is so clean, and it’s all an organic compound. It’s tested against the California standards for children’s wear, which are the toughest in the States. We are extremely low, there is almost nothing on that fabric. It’s very clean. I am trying to remember. I think California’s standards are 30 parts per million of what they call free formaldehyde. It’s the best measure and ours is like a six, so really low.

Andrew: The other thing I read in the article is Dave Brown, the developer of the patent at Dan River, he said “The molecules are encapsulated in the weave, they are good for at least 40 washes.” Does that mean that at some point that the clothes expire?

Angela: Actually it doesn’t. Forty washes is the textile standard for lifetime of a garment. Textile people will say it is good for 40 washes, which means it’s for the life of the garment. We’ve tested it well beyond that and it really… the bond is strong so it doesn’t give out, for lack of a better word.

Andrew: All right, so now you have your idea. You know that it works. You know where to get the patent. The next challenge is the one that my member said he was having. He wants to manufacture in the US. It’s not just that he wants to support American manufacturing but he also… he’s a guy who creates mugs. He had his mugs created in China. It took them a month to get them ready and it took another month for the shipment to arrive. Its way too much work to do and he said, “I’d rather work with someone in the US even if it means paying more.” It’s tough. He still hasn’t found a manufacturer in the U.S. What did you do to find a manufacturer?

Angela: It was one of the tougher things that we had to deal with in the beginning. Because when you’re small everybody thinks, “Oh, this is just some other mom business” or whatever. It was hard. I was doing a lot of research to try to find different companies and because my supply chain is actually pretty complicated. I have to have yarn, I have to have fabric, I have to have a finisher who puts the color and the technology onto the fabric. Then I have to have a sewer and then someone to distribute it. So I had multiple steps in there.

I was able to find initially the company to actually do the technology because I had to make sure we had someone so we could run it through some plant tests. So that was the first step, finding what we call in textiles as a finisher. So we had sample fabrics put together, ran them through the lab trials and then the plant trials.

I was having a hard time getting a sewer, because of course that is the mostly costly part of the process in making things domestically because our labor rates are obviously higher than many places overseas. The sewer that was known across the United States was the best undergarment manufacturers in South Carolina. And I had called him and asked him if he would take us on and he said, “You’re too small. You don’t really have anything. Call me back when you’re bigger.” I kept looking.

But once I had my finisher, who was actually going to process our fabrics, he said “Who is going to do your sewing?” And this is a small world. Textile, what’s left of it in the United States, is a small world. And I said, “I really want this person in South Carolina to do it, but he’s turned me down.” He said, “Let me call him. I know him. We run product for him. And I think you got something here.” Because everyone in the textile world knew about Dan River. They knew about this product and how well it had done in the market before. When I talked to him the second time, he gave me a chance.

Andrew: Interesting. It’s all networking and connections. There isn’t a website the way that there is for the patents?

Angela: Oh no. In the textile world there is a website called Seams.com and you can find who can supply you buttons, who can supply zippers, who sews, and who does this. But you may or may not get an answer if you are a little start-up saying “Hey, I’m looking for a sewer to sew some underwear for me.”

Andrew: Yeah, so actually you have said that- where was that in my notes? That everything from getting the cotton out of the ground to turning it into yarn, turning it into fabric etcetera, did you happen to catch that Planet Money tried to turn cotton into a T-shirt. They were going to do this series on NPR of how a T-shirt gets made. And the process was so impossibly tough for them that they decided that they weren’t going to do it and instead they were just going to study different elements of the process, because it was very hard.

Angela: It is very hard. And you look at cotton prices. In the time that we have been in business, cotton prices have gone from record lows to record highs just in five years. And that was a move of about 30% up and down, which is tough when you’re trying to price product. But because of that, and you have the finishers.

And it is a natural fiber, so it is harder to make it consistently than it is like a synthetic. Polyester is extruded and it’s not hard to do. But getting the conditions controlled for shrinkage, everyone knows cotton shrinks. So there are a lot of factors in actually working with cotton. But it is, in my view, a superior fabric. And because ours has wicking and odor absorbing technology, it is just terrific for undergarments.

Andrew: So if someone is listening to me and says, “I don’t have these kind of connections. I don’t know where to get started. And I want to manufacture something different, a mug for example. Where do they go to figure out where the right factories are, who the right people are? How do you even get started?

Angela: Well, I do think there are a lot of things you can find online. I mean, I found suppliers for all my other components; packaging, laces, all of that by doing online searches. Just like the US PTO. You can go on their international websites. But in the US, I don’t know of a big conglomerate like that that does it all domestically. I do know that you can go to trade shows in your area. Like if I wanted mugs, if they were going to be pottery, I would go to a pottery trade show. You just have to think through who else would be going to this.

And I did that. I went to the lingerie trade show in New York, called Curve, before we started our production because I wanted to check out the marketing, check out where other people were making their products and that sort of thing. So I think trade shows are great.

And then just calling people. You get a lot of “no’s” but if you call a company that sells mugs. Hey, ask some questions. And lots of times you find someone who is chatty.

Andrew: I see. So it is just a bunch of those calls until you find a chatty person. It’s searches for trade shows, which I get. What about general searches? Where are you looking that is different?

So, for example, someone who is brand new to the WordPress world would just go to Google and do a search for a WordPress issue that they have. I would go directly to WordPress.stackexchange.com. I would search for my answer there and if it didn’t come up, then I would write a question. And by maybe in an hour, I’d get a response that was detailed and helpful. And I would have a couple of other websites like that that I would go to maybe if I needed some personalized help. Where do you go with your experience that I, as an inexperienced person, wouldn’t know to go search for manufacturers?

Angela: Again, I think it is talking to people. I made so many phone calls because in the business that I’m in, plants were closing left and right. So I would say, “Who do you use for your sewing?” I would get the names and then I would call someone at the company. Because the funny thing about working with a non-end producer is it’s hard to find information about them online.

So imagine, I’m looking for someone to supply me with cotton cloth that is not dyed a color. You can’t just go “Who supplied un-dyed cotton cloth?” and you can’t find answers because they don’t market themselves generally that way. Everyone who buys dyed cotton cloth is in the business. It’s not the same kind of Internet searches. I’ve tried, looking for suppliers of this and that. They just don’t pop up the way if you look for tennis shoes.

Andrew: Right. I am thinking it is easier to find a pizza than it is to find something like this and I could walk down the street and find pizza.

Angela: The end steps are easy. So if you say “I am looking for underwear” you are going to get a lot of underwear sellers. If you are looking for the steps back up the chain, it is much more difficult which is why I’m saying I found trade shows, I found talking to people in the industry. Dave Brown who we hired was a great resource because he knew the industry. My dad was a great resource because he knew the industry. But I had to reach out to those people.

Andrew: Do you think there is room for someone in my audience to say, “Hey, this is enough of a problem. I’ll create the directory of it. I’ll create the Angie’s List of American manufacturing and then expand it to the rest of the world.” Is it that much of a problem or am I imagining it is because I am an outsider?

Angela: I don’t know. Things change so much, there could be something like that now that I haven’t needed to rely on because I have my supply chain and I’ve had it for the last five years. But there may be something like that. If there’s not, I’d think it’d be great. Like I said, in textiles the one called Seams.com is the most consolidated that I ever found. And it really has everything that you’d need to make an article of clothing. But just because you get the list doesn’t mean someone is going to act.

Andrew: Right. You still then have to go and push through. So you did all that. You pushed through. Now it’s time to sell. Where did you get your first sale?

Angela: Well, we had a three pronged approach. This is underwear and it is underwear that is dealing with sweat and odor and things that people don’t always talk about. I wasn’t exactly sure what the best method was going to be. So we developed a website. We had some panty parties to sort of launch it and get the word out, get them on some people quickly.

And then we tested them with retailers. I’d been working with a couple retailers as I was developing the product to talk to them about what I was doing, “Would you try this? Does it sound like something interesting?” So that when I actually had my finished product they were willing to try it. It wasn’t like I just walked through the door and said “Here’s my bag of goods. What do you want to buy?”. I built a relationship up over some month ahead.

Andrew: Showing them prototypes, is that right?

Angela: Yeah, prototypes. Letting them feel the fabrics, letting them see how we were thinking about the name and the marketing, that sort of thing. And getting input because talking to retailers who have been in the lingerie business for 25 years, you can learn a lot about… they see products come and go all the time. For your listeners, what I’ve learned, and this probably applies to all business, but, everything happens through people. And the more people you can touch and reach and get their input, who is willing to give you time, the more information, the better off you will be. So that’s what I did in the beginning is try to get as much input and help as I could.

Andrew: Do you remember one piece of feedback that you got from a retailer before you created your first product?

Angela: From a retailer. Yes, for one of them they said, “This might all be great and work like you said it works, but to has to be comfortable. Like, women, it doesn’t matter. It just has to be comfortable because that is what they complain about when they come in about bras and underwear. If it is not comfortable, they won’t wear it.” That’s number one. Another piece of question mark or feedback that I got early on was how are you going to sell this thing. Kind of to your question. At the beginning I thought, “This is not going to be hard. It is going to sell itself.” And I think every entrepreneur thinks their product is so great, that it’s just going to pop off the shelves and sell itself.

Andrew: Because it makes logical sense. This keeps you from smelling and makes you feel comfortable.

Angela: Yeah, but marketing is hard. People are busy. People have stuff coming at them online, commercials all day long. So really getting people’s attention to understand and hear about your product and then taking the step to buy is much harder than I thought it was going to be.

Andrew: By the way, I should say that the website is Seams.org, not Seams.com. I was searching and I wanted to make sure to get that out there.

Angela: Thanks.

Andrew: So, you’re talking to them, they’re giving you feedback, they’re also helping you shape your marketing. In fact, in the beginning you were emphasizing that patented technology and then you shifted it to what? How did you position it in the beginning or how did you phrase that positioning?

Angela: Well, because we had three patents now involved with this technology; the odor part, the wicking part, and then the combination of it all. And you want to sound different, you want to be differentiated to other products, so we were emphasizing the patented technologies, and all these things that it does for you. What we learned is that women don’t really care that much about all the details of the technology. They just want to know what it’s going to do for them. So we changed our logo-ing to basically we’re going to keep you ready for anything at any time. Women know what that means and it’s the same for men too. If they have sweat under their arms, it won’t come through their dress shirt when they are wearing our T-shirt.

Andrew: All right. So, you’re talking to retailers ahead of time. Did that actually lead to any sales when the product was finally ready?

Angela: The very first day, I’ll never forget this because we had our launch party in Charlotte, North Carolina. We had about 120 women came. I had invested in several thousand units of inventory at this point. This was our first big party. It was a great success. It was a couple of days. I guess the day before Thanksgiving. We had this thing on a Wednesday, and I was staying in town to do more things.

And Wednesday afternoon, I was driving to my parent’s house to do family Thanksgiving and I said “I’m going to this retailer.” It was pouring down rain. About 4:30 or 5 in the afternoon and I said, “I’m going to go in there and see if she’s ready to buy because I have product here in the car,” and everything. And I took them in there and she had no customers, of course, because it was the day before Thanksgiving and it was pouring down rain. And I took them in there and she bought everything.

Andrew: Really?

Angela: I had six styles, I had four or five sizes in each style. She said, “I’ll take one to two, one of everything and we’ll try.” And she is still our number one selling retailer-

Andrew: Why did she buy?

Angela: Say that again?

Andrew: I’m wondering what made her buy. Was it the fact that the store was empty or what?

Angela: I had been working with her over the last several months telling her what I was doing. Then I told her, “Look we just had a launch event with over 120 women, so there are women out there who now have the product and they are going to need a place to go to buy their replacements and I’d like it to be you.” So she brought them in, she made a great display, so when people come in and new people come in and women’s word-of-mouth telling each other about this new underwear that this gal developed. And she keeps growing her business because women tell each other when they find a product they like.

Andrew: I see. And I see how the event would have introduced it to people who would become customers for her. How did you get people to come out to an event about panties?

Angela: Well, I have some really great girlfriends and they put their list together. And I lived in Charlotte for 12 years myself so I had friends. My friends had friends and we just sent out an invitation to probably 300 people. And that was a good turn out to get 120, so we were happy about it.

Andrew: What was in it for your friends for inviting or what was in it for their friends? I can understand your friend wanting to support you by sending out invitations but what made the event so special that your friends’ friends wanted to come?

Angela: I think people like the idea of what it was going to do. So they wanted to try it. Other women I had asked to be testers, so earlier on we has made about 100 samples of product once we had all our technologies together. And some of those women came. And we had sent them out all over and got feedback. “Do you like this? How’s the styling? Does the liner work? Tell me about this.” So we had already people out there sort of being our disciples for the product.

Andrew: I had Trent Kitsch, he’s the founder of Saxx underwear, you know him.

Angela: Yeah. I don’t know him personally, but I have seen him at the trade shows.

Andrew: Right. So he had underwear for men that kept your unmentionables from sticking to your [inaudible 00:27:38].

Angela: From sticking around.

Andrew: Yeah, right. From sticking around. And he really played off of that for a long time. I remember asking him when he sold his first ones, what did those testers, what did those first customers tell him. And he said, “I didn’t know that the seams were supposed to be done in a certain way. People kept getting scratched in the beginning.” What happened to you with your testers?

Angela: We had a couple things. We had initially an elastic that was… it was soft and pretty and I ordered it. And when they sewed it on, they used a very heavy stitch on it. So, when they came out it was that doesn’t really look like what I thought it was going to look like.

Andrew: Right.

Angela: But we sent the samples out and the women said, “Yeah, that’s kind of stiff. So I went back to the sewer and said, “What’s up with this? Why are there so many stitches hiding the pretty soft elastic?” He said, “We can do a different stitch. This is just the strongest whatever one.” I said, “I think it’s overkill.”

Yeah, so there are things like that that you change as you go and you learn. Because again, as I said, comfort is key in underwear and he learned that too, that you cannot have rough seams, you can’t have labels that are stiff. We use a nice soft satin label so that it doesn’t irritate people’s skin. And when it’s that close to you and that intimate you want it to be really soft.

Andrew: So you had the party. A lot of them had already tested, a lot of your attendees had tested the previous versions. Are you selling that at that point to people who come to the party?

Angela: Yeah.

Andrew: You are.

Angela: Yeah, it was a sales party.

Andrew: A sales party. And you stand up with over 100 women looking at you and say, “Here’s what I’ve created.” Then you start to sell it?

Angela: Well, basically we had displays set up, tables all around. We had a checkout area. I said a few words and answered questions for people. You know women love to shop, so just give them a shopping environment and a lot of pretty underwear laid out on tables and people picked what they wanted.

Andrew: What did you do to make it a pretty shopping environment? I don’t mean to get hung up on this event but that is a pretty nerve-wracking thing to do. You aren’t just selling anonymously online. You are selling to real people, friends of friends. Which means you have to tell them, “Here’s what I made.” And you know in the back of your head that it isn’t as perfect as it possibly could be because you are just getting started. And here you are standing in front of a group of people telling them, “This is what I made and I want you to buy it.” And that is a really tough thing to do. Did you feel any of that, what I’m describing?”

Angela: I did. You feel very vulnerable, is I think the word. I mean you’re out there, it’s like your baby. You’ve created this thing. And if people don’t like it, you’re going to have your feelings hurt to a degree and certainly you need the feedback. “How do you like this? What do you think of these colors?” I’m a pretty tough-skinned gal so I’m always asking for feedback and I’d rather have it than not. Because you can’t fix things and change it if it’s not there.

But yes, I was nervous. It’s always a little funny to say, “Yes, we are having a panty party.” But in a way it is sort of cutesy and women go, “What does that mean? I want to go. Let’s check it out.” Getting people to come to them hasn’t been a problem. Most of the time people want to try a couple different styles and figure out the ones they like best. Its very low pressure.

What we usually do, just an aside, is everybody gets a free one. You just come, you get a free panty. And then you can buy more if you want to. So that’s another reason people come and it takes the pressure off. A lot people go, “I don’t want to go to a party because I don’t want to buy something.” We say, “Just come and get a free one. It’s going to be fun.” We have wine, we have food.

Andrew: All right. Do you still do the parties?

Angela: We do, we do. Not as our primary venue. We do them for fun. If someone says they want to host a party in their town, we can make that happen. We had a big one in Miami, we’ve had them in New York City, Washington D.C, Charlotte, Asheville, North Carolina, where I live now. We do them when the opportunity is there, but we don’t have a team running around doing panty parties.

Andrew: And someone who invites you in to do a panty party gets a cut of the sales? Is that the deal?

Angela: Our hostesses get all kinds of free products.

Andrew: I see. How do you find hostesses?

Angela: People usually ask. They go, “This was fun. I’ll do a party that sounds fun,” or “My sister lives in so-and-so, I’ve given her the panties, she loves them. She’ll do a party.” It’s sort of like that. If it’s not fun, we won’t do it. If it’s not someone who is excited about doing it, we don’t do it.

Andrew: Good idea.

Angela: It is a way for me to get out there, meet more customers, spread the word.

Andrew: And you’ll fly out?

Angela: Yeah.

Andrew: Oh wow. All right. Beyond that, you also wanted to get some sales reps.

Angela: Yep.

Andrew: What are sales reps about? What do sales reps do? They go to stores?

Angela: Yes. So I quickly realized that doing panty parties was fun and it was a good way to get feedback but it was not going to grow us as fast as I wanted to grow. And unless you have a big PR budget, it is hard to get people to your website. I mean, how do you get them to know to come there in the first place? So, we had all these pieces but what we really needed was people out there to get the word out.

So the same retailer who I mentioned before who was our first customer, I said to her, “Who brings you products? What are they are reps or whatever”. And she said yes. And she gave me the names of a couple she thought were quite good. I called them. In fact, I went to New York and met with, or tried to meet with two of them. Neither one of them would actually see me that time but I left product.

I was very persistent so I don’t like to take no for an answer. I said “At least take my product and try it out. I know you don’t want to take any new lines right now but just check it out.” So they took the product and the very next day, one of them called back and said, “I wore these. I love this. Let’s talk.”

Andrew: Wow.

Angela: So that was my first sales rep, the New York/New England district. And then from that I got one in the South, and that one was a good story too. Because you know, reps are actually hard to get. People think “Oh, I’ll go hire a bunch of reps.” But you can’t. Many of them have, at least in my business, it’s not manufacturer’s reps, okay. These are independent reps. They carry however many lines that they want to carry. They usually have a showroom. They don’t take on new lines if they don’t think it’s going to sell because it’s more work for them.

So I was talking to this rep in the South and he said, “Sara Blakely from Spanx came into my showroom way way back in the early days before she was big and tried to get me to take her product. And I said ‘I don’t want any new products, I have enough right now.” He goes, “That was a huge mistake.” So he said, “I don’t want to make that mistake again.”

Andrew: She became a billionaire that became one of the-

Angela: Yeah, so she became a billionaire with Spanx and he missed that boat. When I came along he said, “This is the same kind of cool idea and I don’t want to miss this boat again.” So he is still one of our reps too.

Andrew: Where do you get all the money to get this thing going? There’s no outside funding, right?

Angela: Right. We funded from our savings and have continued to use cash flow and invested what we need to build inventory. And we did win a Harvard prize of $50,000, so that was helpful too. That was a business competition a couple years ago that we won.

Andrew: Were you a Harvard student?

Angela: I was Harvard MBA, yes. The contest was you pitch your business venture and it was a worldwide thing, so I had to compete in the US and I won in our region. Then won the whole thing in Boston.

Andrew: You got to tell people how you pitched underwear at this.

Angela: So much like your audience, software and technology people, the judges were, I think there was only one woman actually. And mostly they were in software or some kind of online, techy, what I call tech stuff because I’m a manufacturer, I call it tech stuff. I’m sitting there thinking, “I am going to talk about women’s stinky underwear.” And it’s freaky enough to talk about it to anybody but here are these judges. And so I said, “I got to come up with something funny.” Because humor breaks the ice everywhere, and it kind of relaxes you.

So I got to get up and give this presentation for 15 minutes. I said, “Okay, I know you just heard about this software company.” That was a great one, we heard about that hardware component that someone else was making. I said, “So, I’m now trying to bring this back to our house and tell you that we are the software that protects your hardware” and they all started laughing because, it broke the ice.

Andrew: Yeah.

Angela: It was good, it was good.

Andrew: And you have to do that a lot. So my problem with talking about it is, I had no problem talking about–well a little bit, talking about Saxx. The issue is that, I think because there is so many issues about sexism in tech that I want to make sure that I am not going to labeled by somebody on Twitter as the guy who said something wrong, you know? So I’m going out of my way to make sure not to say anything wrong in which case you don’t say anything at all. So, that’s what’s going on in my head. You’re coming across this too, right? From even people who are well-intentioned.

Angela: I mean, for us, we struggle too. When you’re talking about underwear and you’re talking about underwear that solves problems, which is what we do, you have to get the word across somehow. But you’re talking about a product that no one can see. You can’t really do before and after shots to show the benefits.

Andrew: Right.

Angela: So how do you talk about it? How do you market it? This has been a big challenge. We got our manufacturing set up, that was hard. But the ongoing challenge of getting the word out, I think, is the hardest thing. And I think realistically in any kind of consumer product the hardest thing is marketing and getting the word out, because you’re competing with so many products and so much information out there. I mean, I think especially-

Andrew: But you’re good at it. Oprah-

Angela: No, we try to be sassy. We try to be fun. We try to be attractive and sexy with our website. We don’t want to… we’re not overly techy on our website, we’re very feminine because we want women to go on there and go, “Yeah, that’s pretty. I want to try that.” Because when you are wearing pretty clothes, when you are wearing pretty underwear, you have a better day. It’s been proven actually. There have been studies that show you’re emotionally happier if you have on nice underwear.

Andrew: I had no idea.

Angela: Yes.

Andrew: Here’s what I did know. I am looking at Oprah.com, a piece called, “Slip into something more comfortably absorbent” and it’s about Knock out Smart Panties.

Angela: Yes.

Andrew: They are different. How did you get on there?

Angela: Well, we have a great publicist who we worked with over the course of our years and we sent product to Oprah. We sent product to all of Oprah’s team. We sent product to all kinds of editors all over New York, San Francisco. All the big TV shows. We sent it out and tried to get them to talk about our product. I mean, that’s how you get it out there.

But like I said, it’s not easy like you can send a purse. Or you are doing your coffee mug and you have a great coffee mug design. You can send them out to a bunch of celebrities and hope that they’ll drink coffee on the Today Show with your mug. But you can’t do that with our product, you have to say something about it. So we had this extra step of a challenge not just to get it on someone, but again actually give a testimonial. But that’s what Oprah did for us, which was terrific.

Andrew: It wasn’t a huge post as far as I can see for traffic. But it allowed you to then get credibility on the site. That now it’s suddenly something that Oprah.com liked.

Angela: Yeah, and she’s actually run the story two or three times on Oprah.com.

Andrew: I see.

Angela: So every time we get a spike in web sales, we’ve had big, very good TV spots that were Fox News in D.C. when we lived in Washington where I started the business. Did a great piece that they ran in Philadelphia, Phoenix, Miami. It kind of went viral because it was just a really great story and it was about underwear. So they thought, “Oh this will be something interesting for people.”

Andrew: What’s your hook? How did you get the media to be interested in the product? What do you say about panties, about your story? What is it?

Angela: We talk about, forgetting that, we talk about innovation and underwear. High tech undies. Pretty panties with benefits.

Andrew: I see.

Angela: Smart panties, that kind of thing. It is not just, here is a pretty new color. It’s panties with benefits.

Andrew: I see. And who comes up with that? Is that you or the PR firm?

Angela: That particular line, “Panties with benefits,” came from one of our reps in Canada. “Smart panties” is one of our trademark names that we use as our sub-brand. We find a clever phrase that we like, we start using it. And you can tell when people respond to something. They get it. As opposed to saying, “These underwear are really great for sweat and odor.” People don’t go up to you and go, “Can I buy one right now?” You go, “Do you want to try the best new underwear that you have ever seen?” Then someone’s going to try them. So the message, the marketing is very important and we have adjusted that as we’ve gone along.

Andrew: So I understand why’d you want to get on Oprah. I understand why’d you want to get on Rachel Ray, Fox. I’m looking at a list here of places you’ve pitched and were excited about you. But Mixergy. I know why I’d want you on. You’re the kind of entrepreneur I want to feature. You’re not someone who the rest of the tech community has talked about. You’re creating a product that’s tech oriented, but you’re also… you’ve got something physical, which is hard, frankly, for me to find smart, successful entrepreneurs who’ve done physical things because I’m in the software space, in the intangible space. What’s in it for you to be on Mixergy? Be open.

Angela: Well, a couple of things. I love my product and I love talking about it, so I’ll take all the opportunities I can to chat with you and people like you because it’s how we get the word out. It helps people hear about our product. What I like to be able to say to people in a format, they’re not expecting to hear about underwear, but hey, you’re going to hear about underwear today that’s actually going to keep you from having yellow underarms or sweaty underarms in your T-shirt. If you are a man wearing custom shirt, you want it took look nice, you don’t want it to have odor. You are on a business trip, you can wear our T-shirt for two days in a row and you’re going to have…

Andrew: I see, so you are thinking some sales will come from this.

Angela: Well, I am thinking to spread the word. Because name recognition is the first step in continuing to get the word out. The more people who hear about us then later on maybe “Oh, I hear that again. Oh, maybe I’ll try one,” because studies show that usually it takes people having to hear about something a couple of times before they’ll make the move to buy.

Andrew: I am now on your site. It is Knockoutpanties.com, but as you said you also have products for men. I’m looking right now at the No-Trace V-neck T, that is what you were talking about earlier that won’t leave stains under the arms. At what point did you decide to expand beyond panties?

Angela: People were asking us for new products. I got emails from customers saying, “I love your panties, these things have changed my life. That’s all I wear. But my husband sweats a whole lot and he could use something like this. Do you make men’s products?” And then I had more come in, “I get night sweats. I am going through menopause” or “I just had a baby and I’m having hot flashes. You should make something like this for night sweats.” So we take all those things in and as we can handle it, we added products.

So, our new sleepwear line called “Mighty Nighties” has done really well. It’s been a huge growth engine for us. And our men’s products we have not sold, we don’t sell them at retail. We basically sell them on our website. So women who like our products will buy them for their husband and try their T-shirt. I mean, I had my husband and another guy go on the Appalachian Trail last summer for a week with five kids and they each wore their T-shirt the whole time. No odor.

Andrew: Really?

Angela: Yes, yes. So I have a lot of test cases, we have a lot of testimonials. I love having people try our products and see how great they are.

Andrew: It looks great. I didn’t know you guys did this. I didn’t know you had anything for men. And I was ready to interview you. I mean, I knew before we started but I didn’t know you as the broad manufacturer. I thought of you as just panties. So, it’s looking for feedback from people.

Angela: Yep.

Andrew: So how do you know… did you do any research to see if the market is already saturated? Is there anyone already doing this? Is the market big enough? Can we get into stores? Or did you just say, our customers are asking, let’s see if we can put it up on the site. And if it sells, terrific, and if it doesn’t we will pull it down and go in a different direction. What is the process?

Angela: Usually what we do is we have a handful of retailers that I consider to be retail partners. And we have an idea for something new, like a new style of panty or a bathrobe or like we did with the sleepwear. I will go to them and say, “What’s your best selling style in the nightgown? Do you think a nightgown in our product would sell?” So I try to get them to tell me as much as I can learn. Obviously, we try to get input from our customers, but retailers who see hundreds and hundreds of customers can see more patterns.

So, “What’s your best selling color in sleepwear?” If I am going to launch sleepwear I can’t do 10 colors, I have to pick a couple. So I say, “What are the top selling colors? What length in nightgown is top selling?” So we try to hone in on what is the top and we start with that. And if that does well, then we can “Let’s do a shorter version” or “Let’s do a long sleeve version.” But we’re still a small and growing company, and we can’t throw out a line of 12 different products and see what does well. We try to figure out what styles… and I am not reinventing fashion for sleepwear. We are just doing a better fabric. So we take the styles that we already know sell well.

Andrew: I see. You know my dad was in manufacturing women’s clothing. And I used to go every Saturday or Sunday to do some collections with him. He’d go to the stores, see how things are going, they’d pay him in cash and some of the stores would. And I’d get to see what the process was. And often he’d say, “I’m thinking of making, like that pan over there that you have. What do you think? Is that something you guys want? I think I can cut your costs on it.” That’s the approach and that’s what you were saying too.

Angela: Yeah, yeah, exactly. Hey, “Does this sell for you? What’s your best selling cut? What weight do women like? Do they like lighter, heavy, thin? What do people want?” Because you can save a lot of money by asking a lot of questions as opposed to making a lot of stuff and waiting to see if someone will buy it.

Andrew: Because the retailer does see back the feedback that the customers give. Customers will complain back, will complain to the retailer. “Why don’t you have this color?” or they come in with a different outfit and say, “Do you have something in this color?” And you get to see what colors they are interested in, what shapes they want.

Angela: And I was telling you that after now being in the trade show circuit for five years, because this is our fifth year anniversary, there are so many consumer products companies that come and go. Just in my business, lingerie, you’ll see people come in, they’ll be at one or two shows and then they never come back. It is a hard business.

It’s hard to get enough critical mass to support the infrastructure that you have to have to ship it, and make it, and hold inventory and have a supply chain that is actually reliable. So getting the input, getting the word out to the customer, you have to have it all working together. Because if you get PR and you don’t have any product, it doesn’t do you much good because you can’t sell it. So, it’s tough. I don’t think you can get anybody in consumer products to say it’s any easy business.

Andrew: I can imagine. Why would you get into it?

Angela: I don’t know what I was thinking some days.

Andrew: You were a textile consultant, right? Working for… what was the name of the big consulting firm?

Angela: McKinsey.

Andrew: McKinsey, right. Did you ever feel like, “I used to go to these great hotels, I’d have these fantastic dinners. I wouldn’t have to take the…” well, I guess you have to take the work home with you. “But what am I doing in the trenches, in manufacturing?” Did you ever miss the old days?”

Angela: Well, everything has its highs and lows and the grass is always greener. But I went into McKinsey and their manufacturing practice because I grew up, I always liked making things. And I had never been in a business where I had an opportunity because I ended up consulting to manufacturers. My first job, or my first degree was finance, because I didn’t want to do engineering and I got all these finance offers. I didn’t want those. So I decided to go into consulting where I could do supply chain and manufacturing. And that’s how I got more and more into this.

But when I had the opportunity with this product, it all just fell into place. With a patent there and so many of the stars just seemed to align that my family and I sat down at the table one night and I said, my husband and I talked about it, and I said, “I think we can buy this patent. It’s available. But if we buy it, I actually have to go for it.” We’re not going to spend all this money to buy this patent and the kids were there and they were young. They were all in school age but they were young and I said, “This means mommy is going to be working again.” Because I hadn’t worked for the last year or two. And they were like, “That’s okay with us.”

There were days though that it wasn’t like that. My little boy came in one time, I guess we’d been at it a year, a year and a half maybe. And he said, “Mommy, all you ever do anymore is work on the computer.” Because I do a lot at the computer. And a lot of phone calls from my desk. And he said, “It’s not fun anymore.” And that, it really broke my heart. I said okay I have to do better. I have to wrap it up before they get home from school, which is a great thing about being able to work from home. I mean, I have a home office and our distribution and our factories are all within driving distance for me.

So that is a long answer to your question about “Do you ever miss the…” I do not. I don’t miss travelling. I don’t miss reporting to other people. I like running the show. And I like the show that we run because it is a product that is helping people and I love that.

Andrew: I interviewed someone yesterday who worked for a consulting company and I forgot to ask her about the time that she had to ask permission to go to the bathroom because things were just so rough. It was such a time crunch. And that is when she said “That’s it. I’m done.” You know, there is one thing that I forgot to ask you about. At one point, you bought another patent in the fall. You worked with the consultants in the lab, you worked on it and then what happened? That is a story that I think is worth talking about.

Angela: Yeah. We all have our low points in business. And I thought: okay, I bought this patent. I had the developer of the patent on the team. We had fabrics. We ran it through the labs and it was working beautifully on these nice soft supima cottons that we’d chosen to use. And we finally got the factory to give us time for the plant run, which is a real run with hundreds or thousand yards of fabric, which is not cheap. And to test it in the factory and it came out and we ran our tests on it. And the technology had not adhered, it had not bonded. And I was like, “Are you kidding me? How can this be?” It had worked perfectly in the lab. And we had run a bunch of tests but they couldn’t figure out why. So we had to wait three more months to get more fabric in to run it again. And it happened again.

So here I am now, almost six months into this with no fabric that works. And I’m thinking, we may get it to work in the lab, what’s the problem? I was very frustrated and one of my girlfriends happened to call me that morning. I was just about in tears. And I said, “I don’t know what I am doing. I am spending all this family… all of our family’s money on all this stuff and I can’t get it to work.” And she said, “Hang in there, hang in there. Something will turn, something will turn.” And I didn’t mention this before, but I collect dragons. And it is sort of, I got nicknamed “the dragon” on one of my consulting studies when I was back in McKinsey. So they gave me a dragon at the end of the team. And since then I have been collecting them.

Well, that day when I was so slow and pretty much crying at my desk. I had to take my kids down to a singing festival, down outside of Washington D.C. And we got down there and I didn’t know what the festival was about. I just know we had to be there at this time for the kids to sing. I get down there and I look up. And the whole festival is filled with little flags and ribbons and nothing but dragons. The whole thing is dragon flags. Because it was a Celtic festival, which made sense. But I looked up at that and said, “That is some kind of sign. I am going to hang in there.”

And that night when we got back and I got back and was really looking at the fabrics. I washed them both and I was doing a bunch of things. And I realized it was something different. The lab fabrics were different than what they had sent us from the factory. And it turned out that the manufacturer of the fabrics had done an additional step that he hadn’t told us about, that the lab wasn’t doing. He applied a softener to the fabric before it got dyed. And that was causing us not to be able to get that bond. So once we figured that out, it worked like a charm.

Andrew: That was it. Just sticking with it.

Angela: Sticking with it. I am a big observer of patterns and details. And just going back and saying, “Why does this feel a little different?” They said, “We are doing exactly what you told us to do,” but I said, “I think there is something more.” And, finally, got them to walk through every single step. And they go, “Oh, we did do the rinse.” “What does that mean?” “Oh, that is some kind of rinse for slickness that they put on.” “Well, that’s it.”

Andrew: Get rid of that thing.

Angela: Yes, get rid of that.

Andrew: I get it. You don’t believe in magic though, do you?

Angela: No.

Andrew: Do you really believe that that was a sign from the universe?

Angela: I don’t believe in magic.

Andrew: But you do believe that was a sign.

Angela: I do believe that sometimes when you get down and start to question what you’re doing, that a little sign from here or there, I believe it’s from God, that’s what I believe. Other people have different beliefs. But I keep my eyes open for signs, let’s put it like that.

Andrew: All right. Well, I just bought a pair of boxer briefs.

Angela: Good for you.

Andrew: I really got to try this on for myself here. I wish I had it before so I could try it in the interview, but I’ll have it on afterwards.

Angela: Good.

Andrew: You know, the process was really straight-forward. But you didn’t create your own shopping cart. The tech on the site is just you using off the shelf solutions. The hard part is what we’ve just discovered here behind the scenes; how you came up with the idea, where you found the patents, how you got a manufacturer, how you kept pushing until you got into stores, the creative ways you marketed using the parties. I so love that you came on here to tell the story of how you did it. Thank you so much.

Angela: Thank you.

Andrew: You bet. Thank you all for being a part of it. And keep complaining, guys. If there is something that I’m missing in the interviews, you can see I really take it to heart, and I’m glad that we’re able to do an interview for you to follow up on the need for more manufacturing. Thank you, Angela, and thank you all for being a part of it. Bye, everyone.

Angela: Thank you, bye-bye.

Andrew: Bye.

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